When it comes to live performances, merchandise sales can be a revenue stream for artists. From T-shirts to posters, merchandise allows fans to connect with their favorite artists and take a piece of the experience home.
However, negotiating merchandise sales can be a daunting task, especially for emerging artists. If you are a music artist, what do you need to know to ensure you are getting a fair deal?
Understanding revenue splits
When negotiating merchandise sales, understanding revenue splits is critical. Typically, revenue splits range from 50/50 to 70/30, but these can vary depending on the promoter, venue and popularity of the artist.
Setting prices and profit margins
Additionally, factors to consider when pricing merchandise include production costs, profit margins and fan affordability. While prices at two to three times the production cost may ensure a reasonable profit margin, prices that are too high could deter fans from making a purchase.
Protecting your brand and trademark
Further, protecting your brand and trademark is crucial. Artists should ensure that any merchandise featuring their name, logo or likeness meets their quality standards and does not infringe on the trademark rights of others. They can also set clear guidelines for merchandise quality and design to protect their brand reputation and register their trademark to prevent unauthorized trademark use.
Merchandise sales and taxation
Finally, merchandise sales are subject to taxation, and artists must understand their tax obligations. These include obtaining necessary permits, paying sales tax and reporting income from merchandise sales.
Seeking to secure a fair deal
Navigating merchandise sales in live performances can be a complex process. By seeking the guidance of an advocate, you may manage the legal process with more knowledge and confidence. Also, having legal counsel may help you better protect your rights as you seek to secure a fair deal and make the most out of your live performances.